Wed. Feb 26th, 2020

The Government will pay 5,503 million to Communities and municipalities in installments on account one month after the 10-N elections

The Council of Ministers approved on Friday a royal decree law that will pay the communities 4,682 million euros of deliveries on this year's account and 821 million to the municipalities, in total 5,503 million euros.

This has been confirmed by the acting Minister of Finance, María Jesús Montero, at the press conference following the Council of Ministers in which she has informed that the decree law, which will be validated in the Permanent Deputation, "shows a way" to that communities and municipalities "do not become victims again" of a budgetary and institutional blockade of the central government.

The 4,682 million that will be paid to the communities add up to the 2,136 million that they have already received in 2019 by different budgetary forecasts, such as the increase in population.

With these amounts, according to Montero, the communities will receive a total of 102.8 billion euros for regional financing this year, 7.15 percent more than the previous year.

Regarding the municipalities, the minister has indicated that with the update of 821 million payments on account, local financing rises to 18,879 million, 4.6 percent more.

According to the minister, Autonomous governments will begin to receive, from today, a letter informing them of the final amount they will have in concept of deliveries on account with the settlement of 2018 that has been "frankly positive".

In the press conference, the minister has considered "a milestone" that the autonomous communities and public services they provide are not again subject to a government that is not in full capacity and with extended budgets.

"Never before has there been the case of updating deliveries on account with extended budgets and a functioning government," he said.

Montero has insisted that the decree "strengthens" regional and local financing and has ensured that "this route" will serve as "guidance" for the next reform of the regional financing model and its organic law so that territorial budgets do not depend on the budget General of Spain.

The minister said that "there are no changes in criteria" in the update of deliveries and recalled that the impediment that, at the time, the State Advocacy wielded was that it was understood that it "conditioned" the work of the incoming Government.

On the other hand, the Council of Ministers has approved via Royal Decree Law a urgent measures package worth more than 700 million euros to mitigate the effects of the insolvency of the Thomas Cook business group, as well as the strengthening and improvement of the competitiveness of the Spanish tourism sector. Among the measures, a financing line of up to 200 million stands out to serve the affected companies, as well as the provision of another 500 million to support the modernization of tourist infrastructure.

The Vice President of the Government and Minister of the Presidency, Relations with the Courts and Equality in office, Carmen Calvo, said in the subsequent press conference of the Council of Ministers that the Government has launched "a reasonable response to a crisis to dampen in terms of employment and economic activity, the situation is such an important sector of our economy as tourism. "

The vice president outlined the main measures put in place by the executive, with special attention to the Balearic and Canary Islands, to try to solve the situation generated by the British operator and try to give a comprehensive response to both workers and companies.

Acting Minister of Industry, Commerce and Tourism, Reyes Maroto explained in a press release that the Government has worked "intensely" to coordinate the work of public administrations with the private sector in order to define a package of measures that is specified in this royal decree law "with which we want to minimize as far as possible the effects of the insolvency of Thomas Cook, but also improve the competitiveness and adaptation of the tourism sector, which is key in the Spanish economy, to the new global market trends ".

The Royal Decree-Law, which is composed of four chapters, divided into six articles, two additional provisions, a transitional provision, a repealing provision and three final provisions, indicates that "the seriousness of the situation" has made a rapid regulatory action essential to respond to a situation of "extraordinary and urgent need".

The actions and measures respond, mainly, to a principle of temporality and attend to all the affected autonomous communities, and especially to the Canary Islands and the Balearic Islands for being territories uniquely affected by the situation.

Financial support measures

Financial support measures include a financing line of around 200 million euros to meet the financial needs of the affected companies. In addition, 15 million euros will be allocated to the Autonomous Community of the Canary Islands and another 8 million to the Balearic Islands "with the aim of recovering the loss of connectivity, consolidating diversification and improving the destination".

The royal decree law also makes available to companies another 500 million euros of the Financial Fund for Tourism Competitiveness that will aim to financially support projects developed by tourism companies aimed at adapting and improving competitiveness, "especially those that contain actions of digitalization, innovation and modernization of services ".

The execution of this initiative will be channeled through FOCIT – subscribed to the Ministry of Tourism – and its financial administration will be carried out by the Official Credit Institute.

In addition, the Government will allocate an additional 1.48 million euros to Segittur (a company under the Ministry of Industry, Commerce and Tourism), in order to support the transformation of destinations within the framework of the Smart Tourist Destinations Strategy.

This line of loans is included in the package of thirteen measures approved last week by the Government to address the bankruptcy of the British tourism giant. Among them, the creation of a commercial incentive for Aena's tariffs, authorized by the Aena executive board, stands out.

Airlines will be entitled to exonerate 100% of passenger fares in additional seats for international flights during the winter season. The cost of scale is thus reduced by 38%. In addition, Enaire route rates will also be reduced from January 2020, which will mean a discount of up to 12%.

Among the most prominent measures in the royal decree are support for the extension of the period of activity of workers with fixed discontinuous contracts linked to the tourism sector in the Canary Islands and the Balearic Islands. Thus, the Social Security bonuses will be increased in discontinuous fixed contracts of up to 50%, which until now were applied in January, March and November, and will also be extended to the months of October and December.

On the other hand, among the measures to support the companies affected, the plan includes the launch of several single windows in the Treasury of the Social Security and the Tax Agency to inform about the possibilities that companies have to defer payment. of quotes and some taxes.

Likewise, the Government, in coordination with the autonomous communities, will offer support and information to companies on how to proceed in the bankruptcy process that will be opened to collect the debts of Thomas Cook.

In addition, the Public State Employment Service (SEPE) will promote the application of active policies in the Canary Islands and the Balearic Islands to favor the relocation of Thomas Cook's workers.

The plan also includes measures to recover tourism demand and improve the destination. Among them a promotion program of Spain as a destination, the development of measures to consolidate the tourism offer of the Canary Islands and the Balearic Islands, the reinforcement of the Network of Intelligent Tourist Destinations.

In addition, through the Ministry of Justice, we will proceed to design a legal strategy in defense of general interests with the objective of demanding responsibilities from the company Thomas Cook.


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